Just a few initial thoughts following the meeting today with CEOs Sam & Leandro.

Look, it's an ag business and will have all the usual ups and downs associated with that -- as much as they try and mitigate. Weather, pests, disease, costs (fertiliser, labour, water etc), market pricing are all variable factors. Plus there's just the usual biannual fluctuations with olive yields.

The positives however are certainly noteworthy.

As Leandro pointed out, Olive trees are the "Eucalypts of the Mediterranean" -- very hardy. A tough year will impact yield, but the plants will typically survive. And, clearly, with 8-9x the cost advantage of the industry average, they have a lot of smarts in growing and harvesting olives.

There is a growing demand and awareness for quality olive oil (fwiw i genuinely think the science is pretty solid on the health benefits vs seed oils). And given it takes at least 3-4 years before a tree will start producing, and 7-8 before it properly matures, it will take a long time for any meaningful supply side response.

In fact, there's a significant pipeline of supply we should expect to come to Cobram in the years ahead as their current assets mature. Assets, it should be noted, that are very conservatively accounted for on the balance sheet.

I think they are also smart in how they manage the quality of their products. The best stuff goes to the Cobram brand, the next best goes to the Red Island brand, with the rest going to outside brands. Someone told me a long time ago that when it comes to retail, you either want to be at the premium end, or the bargain end -- but never the middle. And Cobram certainly seem aware of this.

While it'd not be part of the core thesis, I think it's sensible that they are looking at other value-adds, be that in farming carbon credits or developing uses for waste products (eg feed stock).

All told, Cobram will likely be a lumpy performer, but over time it seems to have some good tailwinds. It's the kind of business I could see a short-term focused market heavily discounting in bad years, and overvaluing in good years. For a long-term oriented patient investor, there could well be some good buying opportunities.

At present you have a 2% odd yield (70% franked). I suspect, based on their guidance for "materially higher EBITDA" in FY23 the forward yield could be closer to 2.5% or perhaps closer to 3% grossed up. That feels about fair -- not expensive, but not super cheap either. Although I'm shooting from the hip on that.

Recording should be available on the meetings page shortly